Shares in the London-listed Indonesian coal miner Bumi have fallen 25% after it disclosed "potential financial and other irregularities".

The problems centre on its local Indonesian subsidiary, PT Bumi Resources, in which it owns a 29% stake, the company said.

Bumi said it was launching a legal investigation into what has happened.

The parent company was co-founded by British financier Nat Rothschild, along with the Bakrie family of Indonesia.

"An independent investigation has been commissioned to investigate the allegations on an urgent basis, and is to report to the board," Bumi announced.

"The company also intends to contact relevant authorities in the UK and Indonesia, as appropriate, in respect of some of the allegations."

The investigation is expected to focus on how $300m (£185m) of money was used by its Indonesian subsidiaries to develop mining projects.

"We feel it [the investigation] does have the potential to bring to light some gross (and potentially criminal) mismanagement of funds which may turn off shareholders in the short-term," said Richard Knights analyst broker Liberum Capital.

Shares in the company closed down 48p to 148p. PT Bumi shares in Jakarta slid by 19%, while its bonds maturing in 2017 traded down nearly 20 basis points.